The Glossy Podcast looks back on 2024: Inflation's impact, department stores' changing role

Summary

The Glossy Podcast: A Comprehensive Review of 2024 – Inflation's Impact and the Changing Role of Department Stores

Release Date: December 25, 2024

Introduction

In its year-end episode, The Glossy Podcast delves into the significant business trends that shaped the fashion and luxury industries in 2024. Hosted by Jill Manoff, the episode features insightful discussions with industry leaders on topics ranging from the evolving role of department stores to the booming resale market, the challenges of fundraising in a profit-focused investment landscape, the strategic importance of physical stores, and the delicate balance brands must maintain between honoring their heritage and meeting modern consumer expectations.

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1. Department Stores' Evolving Role

Historical Significance vs. Modern Dynamics

Before the e-commerce revolution, department stores held immense power, providing brands with prestige, widespread market awareness, and substantial sales channels. However, the landscape has shifted as brands now have the autonomy to sell directly to consumers, allowing greater control over messaging, merchandising, and customer service.

Insights from Wes Gordon, Creative Director of Carolina Herrera

Wes Gordon emphasizes the enduring importance of department stores while acknowledging their contemporary challenges:

“No, as important as ever... they still have amazing customers and amazing sales associates and managers... But it's not the only thing anymore, right? So now we have our own E Commerce. We're growing our network of our own boutiques and stores.”
— Wes Gordon (00:01:55)

Gordon highlights the necessity of cultivating strong relationships with customers, whether through large department stores or specialized boutiques, underscoring that success hinges on attracting the right clientele rather than sheer volume.

Amy Smilovic's Perspective on Department Stores

Amy Smilovic, Founder and Creative Director of Tibby, offers a contrasting view, opting to stay away from North American department stores due to perceived shortcomings:

“I think we've been a victim to a lot of things, a lot of it self-inflicted. But these bigger online retailers, there seems to be a reckoning coming...”
— Amy Smilovic (00:03:48)

She advocates for partnerships with stores that have a clear vision and are deeply invested in their business, fostering symbiotic relationships that benefit both parties.

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2. Resale Market's Growth Amid Inflation

The Surge of Resale Verticals

2024 witnessed a significant boom in the resale market, with numerous brands launching resale sections on their e-commerce platforms. This trend was fueled by escalating inflation, which steered consumers towards more cost-effective shopping alternatives without compromising style.

Seth Weiser on What Goes Around Comes Around

Seth Weiser, Founder of What Goes Around Comes Around, attributes the growth to consumer desire for exclusivity and access to discontinued items:

“Customers want what they want... they are looking for choices. And of course, you can't really buy from the brand, then you're going to have to buy things from the secondary market.”
— Seth Weiser (00:07:03)

He notes that the difficulties in acquiring certain brands directly have opened avenues for the pre-owned and vintage markets, benefiting both consumers and resale businesses.

Kruti Patel Goyal's Insights from Depop

Kruti Patel Goyal, President and Chief Growth Officer at Etsy, elaborates on the multifaceted value proposition of resale:

“We know that value is not only increasingly important to people in general in this economy... Style, sustainability and value that are rare to find elsewhere.”
— Kruti Patel Goyal (00:07:50 - 00:08:17)

She underscores that the resale market not only offers financial savings but also aligns with broader consumer values such as sustainability and unique style.

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3. Fundraising Challenges in a Profit-Focused Investment Landscape

Shift Towards Profitability Over Growth

In 2024, investors became more inclined to prioritize profitability over rapid growth, making fundraising a more arduous task for startups and emerging brands.

Ricardo Larude on the Benefits of Self-Funding

Ricardo Larude, Co-Founder and CEO of Larude, discusses the advantages of maintaining ownership without external investors:

“We're doing this for us and how we think that this company should be in 50 years from now... there's no rush. There's no... we're not doing it for other people.”
— Ricardo Larude (00:09:48)

He emphasizes the freedom and long-term vision that come with self-funding, allowing the brand to grow organically without external pressures.

Lara Mae Gibbs of Necknada on Strategic Partnerships

Lara Mae Gibbs, Founder and Creative Director of Necknada, shares her experience with self-funding and reflects on the potential future benefits of strategic partnerships:

“We are still self-funded... but I would like to get the business in a position one day where I can bring on strategic partners... but I just haven't felt ready for that.”
— Lara Mae Gibbs (00:10:46 - 00:14:02)

Gibbs highlights the challenges of scaling without external capital but remains open to future partnerships that align with the brand's ethos.

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4. The Strategic Value of Physical Stores

Multifunctional Retail Spaces

Physical stores in 2024 transcended traditional retail functions, serving as marketing billboards, community hubs, and fulfillment centers. Brands recognized the multifaceted value of brick-and-mortar locations in an increasingly digital marketplace.

Jamie Gersh on Store Strategies at Rothy's

Although Jamie Gersh's detailed insights are not fully captured in the transcript, the discussion underscores the strategic placement and design of physical stores to enhance brand presence and customer engagement.

Kruti Patel Goyal Explains Store Redesign at Depop

Goyal elaborates on the balance between emotional and functional aspects in store design:

“We talked about the need for it to be emotional and functional at the same time. And we know that we need to make it functional and... make her want to buy the product and understand why she has to have it.”
— Kruti Patel Goyal (00:14:23 - 00:15:02)

She emphasizes storytelling and creating memorable in-store experiences that drive both emotional connections and sales conversions.

Jeff Rudis on Expanding Store Footprints Globally

Jeff Rudis of Rothy's discusses strategic international expansions to key fashion capitals:

“Paris is really the capital of fashion in Europe... Seoul, Korea... it's what's happening right now.”
— Jeff Rudis (00:16:08 - 00:17:04)

Rudis highlights the importance of establishing a presence in influential markets to serve as gateways for broader regional expansions.

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5. Leveraging Brand Heritage and Authenticity

Balancing Tradition with Modernity

Brands with rich histories face the dual challenge of preserving their legacy while evolving to meet contemporary consumer expectations. Strategic storytelling and authentic brand restoration are crucial in maintaining relevance.

Jacqueline Ardrey on Vera Bradley's Restoration

Jacqueline Ardrey, President and CEO of Vera Bradley, shares the delicate process of modernizing the brand without losing its core identity:

“It was a tremendous... balancing act... we did a lot of research... project restoration... making sure that all of the touch points exuded what we wanted to say about Vera Bradley of Today.”
— Jacqueline Ardrey (00:17:28 - 00:19:19)

Ardrey emphasizes a comprehensive approach to brand restoration, ensuring that every aspect from product design to store experience aligns with the refreshed brand identity.

Neil Morgan on Filson's Timeless Appeal

Neil Morgan, Head of Strategy at Filson, discusses the importance of timeless product designs and authentic brand messaging:

“Our customer base has really shown that our product can stand the test of time... something that's timeless, something that stands for quality and heritage.”
— Neil Morgan (00:19:27 - 00:20:11)

He highlights the enduring appeal of Filson’s products and the strategic use of both long-form and short-form media to communicate the brand's heritage effectively.

Modern Storytelling Techniques

Morgan further elaborates on leveraging various media formats to engage modern audiences:

“We're doing a lot of connected TV advertising and really seeing success around 15 or 30 second clips... you only have this short moment in time to capture the audience attention.”
— Neil Morgan (00:20:32 - 00:21:30)

This approach ensures that the brand's rich history is communicated succinctly and effectively across multiple channels.

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Conclusion

The 2024 episode of The Glossy Podcast offers a comprehensive overview of the pivotal trends reshaping the fashion and luxury industries. From the nuanced role of department stores in a digital age to the resilient growth of the resale market amidst economic pressures, the discussions encapsulate the dynamic interplay between tradition and innovation. Additionally, the challenges of fundraising in a profitability-focused investment climate and the strategic expansion of physical storefronts highlight the adaptive strategies brands are employing to thrive. Lastly, the emphasis on authentic storytelling and honoring brand heritage underscores the enduring importance of narrative in building and sustaining consumer connections.

As the industry looks towards 2025, these insights provide a roadmap for navigating the complexities of a rapidly evolving market, emphasizing the need for adaptability, strategic partnerships, and a steadfast commitment to brand authenticity.

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For listeners interested in exploring these discussions in more depth, full episodes and additional content can be accessed through the episode's show notes. Stay tuned for the upcoming 2025 preview episode featuring Danny Parisi, Tatiana Pyle, and MoMA’s Che Costello.

Transcript

[Jill Manoff]

This episode of the Glossy Podcast is brought to you by Triple Whale. Struggling to make sense of your data, Triple Whale offers a range of solutions designed to streamline your e commerce operations. With Sonar, for instance, you can transform your brand's meta campaign performance in just a few clicks. Learn how brands like Zox Allen and paw.com get increased conversions, accurate attribution, and higher ROAS. Visit triplewhale.combackslash meta to learn more. That's T R I P L E W h a l e.com backslash meta thanks for tuning in to the Glossy Podcast. Merry Christmas. I'm your host, Jill Manoff. Today's podcast is a year in review episode focused on the big business trends that ruled fashion in 2024. You'll hear clips featuring Glossy Podcast guests we've hosted throughout the year discussing the changing role of department stores, the importance of opening stores, and the ways they're leveraging their brand's heritage at a time when a brand story is everything. They also weigh in on the right time to fundraise and how inflation changed consumer shopping behavior this year. Let's jump in. Before the rise of e commerce, department stores were powerful, offering brands cachet through alignment, awareness in multiple markets and of course, sales. But now brands have more sales channel options and that includes selling direct to consumer where, for example, they have more control of their messaging, merchandising and customer service. This year on the podcast, Wes Gordon, the creative director of Carolina Herrera, discussed the brand's distribution mix and where department stores fit in.

[Wes Gordon]

No, as important as ever. I mean, Herrera is a very big partner with all the main department stores. So in this case it's Neiman Marcus Group, including Bergdorf's, it's Nordstrom's, it's Saks, it's Bloomingdale's. It's stores that have really defined and shaped the American luxury culture for the past century. And they remain really important. And you know, obviously we know that they face challenges. We read about them in the news. But at the end of the day, they still have amazing customers and amazing sales associates and managers. And I'm so grateful to them every time that, you know, they point their woman, their women, towards a Herrera piece because she has a lot of options. So yes, it's still super important. But it's not the only thing anymore, right? So now we have our own E Commerce. We're growing our network of our own boutiques and stores. You know, there are specialty stores, amazing smaller stores. When I say specialty store, I mean like a small cool boutique. There are lots of those that we work with who do extraordinary business. At the end of the day it comes down to who has and has fostered amazing relationships with amazing clients. And that could be a little shop in a town or it could be a Bergdorf, you know, in a small town or it could be a Bergdorf Goodman sitting in the middle of Manhattan. But what it comes down to is just it doesn't take a lot of customers for a store to be wildly successful. It takes the right customers.

[Jill Manoff]

Amy Smilovic, the founder and creative director of Tibby, also shared her take on the current importance of department stores.

[Amy Smilovic]

I think the thing that is challenging me right now is just anything that's not in my control. And I think that we are seeing a lot of these bigger online retailers really trying to figure out what their future looks like. And as every day, I'm so grateful that we are not working with any of the department stores in the United States. I think they've been a victim to a lot of things, a lot of it self inflicted. But these bigger online retailers, there seems to be a reckoning coming and some of them we do business with and I hope that they can figure out what the right business model is for them going forward.

[Jill Manoff]

Yes. I didn't realize you weren't in any of the North American department stores. Tell me about like where you feel safe. What makes for a comfortable partner right now?

[Amy Smilovic]

What makes for a comfortable partner is a store that has a point of view and that the store owner is heavily vested in their business. So I think someone like, you know, I would use Max in Denver, Colorado. Max absolutely knows who his customer is. He has a point of view and he is in the store all the time. He knows what product he has. When he is buying designs, he's thinking, you know, is this Tibby going to work with this Levy shoe that I just bought? Can I put it next to this row sweater? He's, he's building a wardrobe in his mind and you have to be present these, these stores cannot just dial this in. And so those are stores that really work well for us. But it's a two way street. I mean if we're not performing for him, the onus is upon us to I have to get on Instagram, I have to really start telling people you gotta go to Max and this is why and this is what he has. And so it's a very symbiotic relationship and we're down for that. But you have to be a store that is willing to be a receiving host in order to have a symbiotic relationship. I think I'm using my biology correctly here and you know, other partners aren't down for that. And so you know Mohawk General Store and Boyd's in Philadelphia and you know that our favorite store in Vancouver, Boboli. And then you've got a big store like Print Homme in Paris who is able to work in a very unique way. I mean, when I go onto the floor at Print Homme on the second floor, the salespeople there know me, they recognize me because they watch the IG lives and so they're vested in our business and it makes a huge difference.

[Jill Manoff]

Resale continued to boom this year with more brands launching resale verticals on their e commerce sites and more consumers turning to resale to add interest to their wardrobes and of course to save money. According to this year's glossy podcast, guests from leading resale companies, including what Goes Around Comes around founders Seth Weiser and Gerard Maioni, inflation in the primary market this year has had a big positive impact on their business.

[Seth Weiser]

I think for us it's been a benefit, of course, because customers want what they want. And so when the brands with their exclusivity and their interesting practices make it harder for the consumer to kind of get exactly what they want when they want it, the consumer's then looking for choices. And of course you can't really buy from the brand, then you're going to have to buy things from the secondary market. And for us that's kind of been a bellwether to help people enter the pre owned funnel, to enter the vintage funnel, both from the standpoint of whether they can get what they want now or a lot of these products are discontinued and they aren't even available anymore from the brand. So it's a kind of two way street in terms of how it's trickling down to us.

[Jill Manoff]

Depop CEO Kruti Patel Goyal, who is now president and chief growth officer at Etsy, also mentioned the economy's impact on her company.

[Kruti Patel Goyal]

We know that value is not only increasingly important to people in general in this economy when they are making harder and harder choices in terms of where they spend their money, but also it's.

[Jill Manoff]

A core value prop of resale in general.

[Kruti Patel Goyal]

I think that we have this incredible combination of all three of those things.

[Jill Manoff]

Style, sustainability and value that are rare to find elsewhere. We're going to take a quick break to hear from our sponsor. What's stopping you from delivering your best meta campaign performance this holiday season? A more complete view of your customers and how they purchase. With Triple Whale's sonar integration with the Meta Conversions API, you can send enriched first party data back to Meta to help you optimize your marketing mix. That way you can identify more customers, improve your targeting and drive a higher return on ad spend. And it's as easy as flipping a switch. See for yourself and discover why leading brands like Zox Allen & Paw.com Trust Triple Whale to transform their growth. With deeper insights, you could have your best Q4 yet. Visit triplewhale.com meta to learn more. That's T R I P L-E W H A L E.com meta this year, as investors pivoted to prioritize profitability over rapid growth, fundraising became a greater challenge, to say the least. But for many founders who joined the Glossy podcast this year, it made no difference. They're self funded and would like to keep it that way. Ricardo Larude, co founder and CEO of footwear brand Larude, spoke about the perks of growing his business without outside investors.

[Ricardo Larude]

No, we own outright. I mean we got like a friends and family round in the beginning, a safe, I think the whole amount that went in was a million dollars. And we have a very, we do give stock to employees. I mean a lot of people that whoever's building significant value gets a little piece of equity. Some people are doing well now, but it's us. We don't have institutional capital behind. I mean we're thinking if we should do that in the future or not. We do the whole idea that we're doing this for us and how we think that this company should be in 50 years from now, I think it allows us to build it right. So there's no rush. There's no, you know, we have our own rush. But it's not, we're not doing it for other people. We're doing it for us.

[Jill Manoff]

Lara Mae Gibbs, founder and creative director of activewear brand Necknada, said avoiding investors has served her company well, but she's not against taking outside investment in the future.

[Lara Mae Gibbs]

So we're still self funded. So we are. Yeah. Nine years of self funded business.

[Jill Manoff]

That's amazing.

[Lara Mae Gibbs]

It is amazing. It's, you know, it's tough. Like we have a team of over 20 now and yeah, we're self funded. I mean I'm not ruling it out of the question. I would like to get the business in a position one day where I can bring on strategic partners because I mean, obviously I'm pregnant now and my sister, who's my business partner has had two little babies and I am so hands on across all aspects. Like I will work as the head designer, as the creative director and then you know, normal brand director duties. We do have business advisors so I'm supported in that sense. I have some amazing partners who I've given shares to like small percentages of shares so I'm able to have that business support which I think is how I've been able to hold it all, to be honest, because I have incredible advisors who can help in the aspects. That is just beyond my capabilities now because the brand has grown so much. But yeah, in terms of funding it's still all, all self funded. So it forces you to be not excessive. Like every purchase order we're still like, are we going to sell it? How much do we need? We have the problem where we keep selling out of stock because we don't want to over place at production because we don't have the capital. So you know, we could easily get a partner and then they pump all this money through and we produce a lot more. But then we are going to have a lot more excess potentially if it doesn't sell one season. And so yeah, I just haven't felt ready for that. But I would say I'm getting more warm to the idea of one day partnering just with a strategic partner that will still uphold the ideals of the brand. I think honestly that's the tough thing. When you partner with someone financially, are they going to kind of push you in directions that isn't true to you? And we've worked so hard to keep the foundations of the brand and the ethos not always about, you know, profit first. And even when you look at our margins and you know, they'll probably come in and be like why are you, why are your cost of goods this much? Or why aren't you charging more retail? You know, I have wanted to keep it accessible and not price ourselves out of the market, for example. So yeah, I think it's, you've got to be ready for it. I've just had so many friends that have sold because they're tired or they just feel like they can't do it themselves and, and it hasn't been the right partner. So I think in the next couple of years for sure, I would like to partner with someone that can like also help us open all the stores globally. Like I can't be everywhere anymore. Like I definitely spend most of my year traveling and it's been amazing for the last 10, 12 years and I love that I'm able To be based in, whether it's Paris or America, different parts of Europe. My boyfriend's Italian, so now we're in Italy all the time. But to reach the full potential, I feel like we do need someone to, like, kind of help us. So we will see.

[Jill Manoff]

Opening a store isn't cheap, but many brands this year deemed doing so worthy of the investment. Along with sales channels, they used them as marketing billboards, community gathering spaces, fulfillment centers, and more. Podcast guests, including Rothy's cmo Jamie Gersh broke down their store strategies this year.

[Kruti Patel Goyal]

Of course, it's a marketing channel and, you know, having been in stores my whole life, there's nothing better than a tangible experience with your customers and honestly, having your sales associates be the best brand ambassadors they can be for your brand, 100%. But. But with that said, when we redesigned the store, we talked about the need for it to be emotional and functional at the same time. And we know that we need to make it functional and, you know, convert customers when they come in the store. And so how do we do better storytelling when we're in there to make her want to buy the product and understand why she has to have it? And I think the experience delivers on both the emotional and functional side really well.

[Jill Manoff]

Yes. What's informing, what's opening where you're opening.

[Kruti Patel Goyal]

All these stores, so, you know, it's a combination. The Flatiron district and being, you know, right on fifth Avenue in the middle of the Flatiron in New York was a no brainer. Right. We want to be where the action is and that is such a hotbed of retail. We are very excited to be there and then other stores, you know, we're opening in North Park, Dallas in a month and we know we have a huge Texas, you know, customer base. We have not been there and that customer deserves to feel us in person. So we've been in Austin, we haven't been in Dallas. So we're excited to get into the Dallas market. And so we look at where, you know, obviously we have a big online business. It gives us the opportunity to see where our customers are and, you know, where they love us and how do we enter markets where we know, you know, they love us already and then we're just hotbeds of retail and where do we need to be?

[Jill Manoff]

The legends team of Jeff Rudis and Tara Rudis. Dan also shared why they're investing big to expand their store footprint.

[Jeff Rudis]

Well, why Paris? You know, we made two strategic moves, Seoul, Korea and Paris. And when you could be successful In Paris retail. And we have a show on there as well, and we're doing our wholesale business. You really have a gateway to the rest of Europe, because Paris is really the capital of fashion in Europe, actually globally. So that was strategic, and it was the first one. Same with Seoul, Korea. When you can demonstrate success in Korea, you can have the rest of Asia, and everybody's paying attention to Korea because it's what's going on right now. The market's Korea. You have youth culture, you have the music, you know, the videos, fashion. It's what's happening right now. So I chose that location to really open up our Asian business. And like I said, we demonstrate success there. And, you know, the. The rest of Asia is open for us to go after.

[Jill Manoff]

At a time when authenticity is the name of the game, brands with rich histories have the advantage, but they also have the challenge of honoring their DNA while evolving to meet the standards and expectations of modern consumers. This year, Vera Bradley's president and CEO Jacqueline Ardrey and CMO Allison Hyatt talked through how they're managing to strike that balance.

[Jacqueline Ardrey]

It really was a fine art, a fine balance, because when you talk about wanting to modernize and elevate and refresh while also giving nod to the heritage and not losing who you are and making sure that you're still recognizable in the spirit for what the brand was created for, you might look a little differently, but people understand why you got there. That was a tremendous, you know, balancing act, if you will. And, you know, we did a lot of research with existing customers, with new customers, obviously looking out there in the market of what's available, and it has been incredible amount of work, but incredibly rewarding. And I really appreciate Jackie calling this effort project restoration, because it's one thing to actually build a new company, if you will, but there's something else about really restoring. Over time, we see that a lot of companies might slightly drift an inch a year away from where they originally started, and then all of a sudden, they're 10 inches away from where they started. Right. And I think we really had this unique opportunity to think about it and also do this holistically. So it wasn't just the product. I'll tell people we're doing a restoration like, oh, a new logo. Well, that's one. Probably the most. The smallest thing that we did is a new logo, a new color, but the new product, the new store experience, new web experience, experience. It really was making sure that all of the touch points exuded what we wanted to say about Vera Bradley of Today.

[Jill Manoff]

On the same note, head of strategy Neil Morgan talked about his approach to modernizing 127-year-old Filson.

[Neil Morgan]

Of course, like you said, I mean, I think the products that we're working with and the materials we're working with, the products we're creating are very timeless and evergreen. The tin cloth jacket is waxed cotton jacket that we get from a mill in England called British Miller Rain. It's been a product staple of ours for many years. Our cruiser jacket, for example, the Mackinac Cruiser, is actually 100 years old this month in March. So we were able to have that patent in 1914. And the style has rarely changed in that period of time. Over a century, people are still buying that product the way it was over 100 years ago. So I think our customer base has really shown that our product can stand the test of time is something that's timeless, something that stands for quality and heritage.

[Jill Manoff]

Let's talk a little bit more about that marketing of your heritage. It's so valuable. Like it goes beyond putting like established date. Like that says a lot actually. But yeah, what more goes into this storytelling and does the customer want to listen? Like, are they tuning out? Is there a five second limit? Yeah, no.

[Neil Morgan]

I mean it's definitely, you know, you got to think about the content we're producing relative to all the content that's out there. I think we're really in a unique space right now where I think the western lifestyle, that heritage brand is kind of becoming at the forefront of fashion and interest. So we're in a moment of really trying to capitalize on that. But as you said, it's a combination of having long form media and we're doing, you know, bigger production stuff to really what are those 5, 10, 30 seconds nib snippets that you can get someone to engage with and move to the next stages of the funnel. So as I mentioned, we're doing a lot of connected TV advertising and really seeing success around 15 or 30 second clips. We advertised around Thursday Night Football this past year on Amazon prime and really kind of connecting to those spaces but knowing you only have this short moment in time to capture the audience attention. So what do you do to get them to make that leap from I see this brand, I like this brand potentially, but now I need to go to the website and see more about it.

[Jill Manoff]

Thanks for tuning in to the glossy podcast all year. If you'd like to listen to these full episodes, check out the links in the episode's show notes. There won't be a normal week in review episode this Friday, but next Wednesday Danny Parisi will be leading a 2025 preview episode with myself and Glossy's managing editor, Tatiana Pyle. We'll be back to normal episodes on January 8th with MoMA head of merchandising Che Costello. Happy Holidays.